A difference-in-differences analysis of the well-being effects of Universal Credit

Universal Credit (UC) was a large-scale reform of the UK welfare system reform, replacing six existing benefits. UC aimed to simplify claims and encourage more claimants into work. We identify its effect on mental well-being, treating the phased rollout from 2013-2018 as a natural experiment. We estimated differences across well-being outcomes associated with UC exposure across Local Authorities, using not-yet-exposed areas as controls. We included working-age (18- 64) respondents of the Annual Population Survey in Great Britain from 2012-2019 (n=245,658), living in low-income households. We tested for differential effects by markers of vulnerability. UC was associated with per-claimant decreases in Life Satisfaction (-0.66; 95%CI -1.01 to -0.30), Happiness (-0.41; 95%CI -0.77 to -0.05) and Life Worthwhile (-0.73; 95%CI -1.03 to -0.42), and increases in Anxiety (+0.79; 95%CI 0.30 to 1.27). These changes were two to six times the effects of the COVID-19 pandemic. Several subgroups experienced greater effects, especially increased anxiety amongst disabled people (+0.19; 95%CI 0.12 to 0.27), single people (+0.13; 95%CI 0.06 to 0.21) and people aged under 25 (+0.27; 95%CI 0.15 to 0.39). The introduction of UC had adverse effects across all four measures of well-being. Vulnerable groups typically experienced greater harms, reinforcing calls for healthprioritising reforms.